Cabot/hudsons claimform - old barclaycard debt

[gettingthere]

I have a letter from Cabot after I had questioned why they hadn't sent me an agreement after a s.78 request. The last paragraph of this letter states;

 

"Finally we would advise you that you are misconceived and misadvised when suggesting that non-compliance with your request would be a criminal offence, the agreement would merely be unenforceable"

 

Their words not mine!

[andrew1]

I have a letter from Cabot after I had questioned why they hadn't sent me an agreement after a s.78 request. The last paragraph of this letter states;

 

"Finally we would advise you that you are misconceived and misadvised when suggesting that non-compliance with your request would be a criminal offence, the agreement would merely be unenforceable"

 

Their words not mine!

 

 

 

Don't you just love it? - they are right of course with the 'Criminal ' part - that has been rescinded in the latest legislation, but the rest is like an old Ford motor car - Classic

 

 

Sarah

[make them aktiv runners]

The actual right to assign a debt is a term and condition of the actual credit agreement. If the agreement is no longer in force, surely this would impeed their right to then assign the agreement.

 

Now something else did catch my eye

Accounts assigned by banks to C, details of account sent to C in CD format. Judge satisfied that assignment was properly and legally effected. Once debts were assigned, C became entitled to enforce because they brought the rights to do so and charge interest at rate lower than OC.

 

So the judge is saying that they are not providing credit as defined by the CCA 1974, yet they can charge interest.

 

On what basis can they then charge you interest ?

 

Excellent point there over right to assign.

 

Already read the response to how they are applying interest. Interest can be applied in line with CC rules BUT they must apply to the court before applying. Not sure if a court can make it retrospective to a date before application.

[make them aktiv runners]

Personally, I feel the judge feel hook line and sinker for cabots game of confusing duties with obligations.

 

Obligations cannot be assigned, but duties can as per the CCA.

 

An obligation can be classed as something that can cause a financial loss such as the refund of charges.

 

To provide a copy of an agreement is a duty.

 

I do worry about these judges

 

Agree theory. I have a slightly different view over the actual assignment, will need your input here as it is complicated.

[make them aktiv runners]

The sale of each Account the subject of the relevant Offer in the manner herein contemplated:

will be effective to pass to the Buyer unencumbered equitable title thereto and the benefit thereof (including in such context, all Collections and other rights in connection therewith received after the relevant Determination Date in relation to such Offer) to the Buyer; and is made in compliance with all laws and regulations applicable to the Seller on the date of such sale (including, without limitation, all laws and regulations relating to the holding and transfer of personal data).

With respect to any Data Transfer, the Buyer warrants to the Seller that it will (i) only use the information and other data the subject of a Data transfer for the purposes of carrying out its obligations under this Agreement and otherwise in its position as (following acceptance of the relevant offer) creditor to the Accountholders in substitution for the Seller and (ii) take all appropriate technical and organisational measures against unauthorised or unlawful processing of the Data and against loss or destruction of, or damage to, the Data.

Joghuj no offence intended here, a couple of extracts does not tell the full story because you could have accidently missed some important detail. That said, there is also DCA’s reading the forum and some have had their forum posts quoted in court. If you do wish to post the full transcript it may be safer to pm it to a few you trust.

I am not ignoring your case here. There is a long history over this subject and at the moment I am just trying to assess your situation with others who are familiar with the old ‘rights’ and ‘duties’ comments.

The first paragraph clearly states that the assignment is Equitable and that technically stands. The second paragraph can be read, in theory as Absolute assignment once the offer price has been paid. I always said this was complex and they were marginally on the law!

This is how I think they are working. The assignment is clearly stated as Equitable. Where assignment is Absolute in all areas other than title, ie after the offer price is paid, the change from Equitable to Absolute is on the courts discretion. The court can only decide on Absolute assignment from the date applied, unless an earlier date is specified. Just to muddy the waters even more, the contract suggests that the fee for each account bought can be paid separately, and it is well known that buyers play the test before buying routine.

If the assignment is not retrospectively decided by a judge as Absolute then any court action is automatically invalid. Not sure over the Rights of Third Parties 1999 here as this is a subject I have not studied in much detail.

The sneaky methods are basically. An excuse that they only bound by the contract terms (not creditor bit) with finance provider due to not having paid the offer price immediately. Remember that they do not pay immediately so the CCA request is technically to a party who is not creditor.

Joghuj, to bring you back in. The CCA still stands, they must supply details of the agreement under CPR18 if the judge agrees, or under CPR20 if you counter claim that there is no valid agreement.

Site owners, I wish you would bring back the Cabot sub-forum. As much as some CFC members only post on the same company, I can see that the other DCA’s follow the same pattern and Cabot themselves claim to be a ‘market leader’. I was flamed by some CFC members for being controversial, yet I still see how valuable that sub-forum was to all.

[joghuj]

Thanks for the info. I can scan the sale agreement in no problem if it will help anyone. Can someone tell me whether I should be doing this or not, bearing in mind it is an agreement between Barclaycard and Cabot? If I should send it directly to members then let me know who wants it please.

 

Cheers

[Suetonius]

No tinks it does not, a Consumer credit agreement which is unenforceable against the debtor cannot become enforceable, it is not possible

 

Unless it is only unenforceable because they failed to provide a copy of the agreement following a S.77/78 request and at a later stage they provide a copy.

[pt2537]

Unless it is only unenforceable because they failed to provide a copy of the agreement following a S.77/78 request and at a later stage they provide a copy.

unless the copy is devoid of the prescribed terms per schedule 6 coloumn 2 of SI 1983/1553:D

[Suetonius]

lol that is a lot of unless's

[surfaceagentx20]

Suetonius, would your answer in post 482 be the same if the creditor had terminated the agreement at a time when it was in breach of a s77 or s78 request?

 

x20

[Suetonius]

Don't know, never really thought about it

[pt2537]

the termination would cause them difficulty IMHO, if the agreement is unenforceable then it remains that way and it is clear that failure to provide a copy makes it unenforceable until they do, so i would say that it would cause the creditor a real problem notwithstanding the fact that they would need to provide the court a copy of the agreement for them to be able to get a judgment in their favour

[surfaceagentx20]

Don't know, never really thought about it

 

Nice one Centurian

[B3rty]

Paul...if the Judge accepts that the agreement was terminated by the OC at DN then isn't the new ruling in the Rankine case relavent and if so how best to overcome?

[pt2537]

Paul...if the Judge accepts that the agreement was terminated by the OC at DN then isn't the new ruling in the Rankine case relavent and if so how best to overcome?

right,

 

it is one thing like Rankine did, to argue that there is an entitlement to receive a copy under s78(1) when a termination notice has been already served and it is another to argue that the agreement has been terminated and there is no need to produce a copy before the court

 

if the s78 request was made before the termination notice was served then it is the case that the creditor must supply it

 

i think it is important to take into account the facts of the individual case and see if they are on all fours with the judgment from Rankine, which incidently is an extremely flawed judgment which was delivered with a distinct lack of care

[B3rty]

Paul I agree with you however this judgement seems to be used now as a benchmark by DCAs not to provide an agreement and also in court as a legal argument and I am sure unless a strong counter argument is in place more judges could be swayed by this..

[pt2537]

yes, it is being used or move aptly abused by these DCAs against debtors who themselves are probably not best prepared. that is the problem as i see it, if you come to the table with the relevent information ie a copy of Halsburys, Goode and Blackstones and some case law as well you will be in a much better situation

[B3rty]

It would be good to get some pointers on what elements to study as I think I maybe in this situation soon myself..

 

I can see the judgement is weak and contains errors like the wrong SI quoted for a start but its the termination issue which could cause the probelm and I think we could all do with looking at the relavent issues around assigment and rights ect ...I personally dont know where to start with this....

[surfaceagentx20]

I go so far as to say the creditor's difficulties would be insurmountable if the agremeent had been terminated whilst non-compliant with a s 77 or 78 request. I haven't studied Rankine and no doubt I ought, but here's why I think non-compliance with a s77 or 78 request pre-termination screws the creditor for all time.

 

Sections 77 and 78 are sections appearing in Part VI of the Act 'Matters Arising During Currency of Credit or Hire Agreements'

 

The purpose of s77 and 78 being included in Part VI, as I understand it, was to enable the debtor to ascertain from the creditor what sum he or she would be required to pay to the creditor to end it.

 

A debtor wishing to end the agremeent will want that information as quickly as possible in order to avoid the amount required to end the agreement rising with the addition of interest etc. Hence the inclusion of a duty upon the creditor to respond with that information within the prescribed period and the imposition of a restriction on enforcement when there is a failure to comply with a s77 or 78 request in that period.

 

If there is a breach of the creditor's obligations under s77 or 78 pre-termination, quite plainly. that will a breach during the currency of the agreement.

 

If the creditor terminated when in a state of s77 or 78 breach, that termination will not be a termination giving rise to any of the benefits appearing in section 87(1) because the benefits of s87(1) are only available to a creditor after service of an effective default notice. A creditor can not enforce whilst in a state of s77 or 78 breach, and since the service of a default notice is a step towards enforcement of the agrement, the power to serve is restricted.

 

For the creditor to be able to later serve s77 or 78 information, the agreement would have to be reinstated by the creditor in order to be able to then deliver during the curency of the agreement. The creditor can not unilaterally reinstate an agreement he has terminated without the express consent of the debtor. The debtor is unlikely to consent to reinstatement where the purpose of reinstatement is to grant rights to enforce which were unavailable and ultimately lost upon termination by the creditor.

 

I'll go and study Rankine and see if there'anything which would cause me to change my mind. Meantime, if these are not insurmountable difficulties, what would be the creditor's get around?

 

x20

[B3rty]

surfaceagentz20..you seem pretty knowledgeable so your thoughts on Rankine would be appreaciated by all I am sure

[StayingCalm]

x20,

 

For a creditor to comply with a s77 or s78 request before terminating an agreement does this compliance have to be with an enforceable agreement, or can he comply with the request, but with an agreement that could possible be unenforceable, but still complies within the CCA.

 

sc

[B3rty]

I believe the answer is yes as the copy can omit signatures

[StayingCalm]

Also, if the creditor complies with a s77 or s78 request, albeit an unenforceable compliance, if you then make a further s77 or s78 request (which you are entitled to do after 28 days) would the creditor then have to comply with this aswell before terminating the account.

 

Furthermore, as has happened on one of my accounts, if the creditor does have to comply with the the second request before terminating, is it sufficient just to state we have previously complied with your request.

 

And, does the potential breach of the s77 or s78 request only occur after the prescribed term, or any time after the delivery of the request.

[surfaceagentx20]

I've been over Rankine a few times since finding the law report yesterday. That would be the decision of Simon Brown QC at a sitting of the QBD at Birmingham in May 2008, not Rankine's earlier unsuccessful application for permission to appeal the decision of Mr Recorder Corner QC sitting at Birmingham County Court.

 

Evidently the Rankines did not impress Simon Brown. He seems to have viewed them as people of no particular high moral standing. He plainly disliked hearing Mr Rankine boast how he had wriggled out of £65,000.00 of debt by arguing legal technicalities. Likewise how Mr Rankine intended to go into business as a credit card buster. He found them to have misused indulgences granted to them as LiPs, incoherent in their pleadings and witness statements and to be untruthful in their evidence. If all this was so and as it appears, the Rankines did CAG and persons seeking justice in relation to regulated consumer agremeents no favours.

 

Brown ruled on 6 issues, 2 only of which are pertinent I feel at this time, namely requests made under section 78 of the Act and default notices under section 87 of the Act.

 

This analysis of the judgment has consumed me in rather a lot of time, to the point at which Mrs X20 has got rather shirty with me. I was intending to deal with both sections 78 and 87 but thus far have not got around to dealing with section 87. This post is therefore confined to my assessment of Simon Brown's judgment in regard to section 78. It's just as well because I fear what follows is tedious in the extreme and if it was any lkonger you wouldn't thank me for it.

 

Section 78

Section 78(1) provides as follows:

(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

(a)the state of the account, and

(b)the amount, if any currently payable under the agreement by the debtor to the creditor,

and

©the amounts and due dates of any payments which, if the debtor does not draw further on

the account, will later become payable under the agreement by the debtor to the creditor.

 

According to the judgment, the Rankines sought to persuade the Judge thay their opponents had failed to comply with the provisions of section 78 and that in consequence section 78(6) operated to prevent the enforcement of the agreements.

 

Section 78(6) provides as follows (though section 87(6)(b) has been repeated since 28 May 2008):

 

If the creditor under an agreement fails to comply with subsection (1)

(a)he is not entitled, while the default continues, to enforce the agreement; and

(b)if the default continues for one month he commits an offence.

 

In the case of 4 of the agreements before the court, the Judge found as a fact that there had been compliance by the creditors with section 78(1).

In one of those 4 agreements, an agreement with Tesco, Tesco were 'seeking enforcement'. It seems to me by reason of the discussion contained in the judgment, that by 'seeking enforcement' Tesco are to be treated as seeking an enforcement order under section 127 of the Act.

 

Section 189 defines an enforcement order as meaning 'an order under section 65(1), 105(7)(a) or (b), 111(2) or 124(1) or (2)'

 

Section 127 is entitled 'Enforcement orders in cases of infringement'/ It provides as follows:

 

(1) In the case of an application for an enforcement order under—

(a)section 65(1)(improperly executed agreements), or

(b)section 105(7)(a) or (b)(improperly executed security instruments), or

©section 111(2)(failure to serve copy of notice on surety), or

(d)section 124(1) or (2)(taking of negotiable instrument in contravention of section 123),

the court shall dismiss the application if, but (subject to subsections (3) and (4)) only if, it considers it just to do so having regard to

(i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and

(ii) the powers conferred on the court by subsection (2) and sections 135 and 136.

(2) If it appears to the court just to do so, it may in an enforcement order reduce or discharge any sum payable by the debtor or hirer, or any surety, so as to compensate him for prejudice suffered as a result of the contravention in question.

(3) The court shall not make an enforcement order under section 65(1) if section 61(1)(a)(signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under section 60(1)) itself containing all the prescribed terms of the agreement was signed by the debtor or hirer (whether or not

in the prescribed manner).

(4) The court shall not make an enforcement order under section 65(1) in the case of a cancellable agreement if—

(a)a provision of section 62 or 63 was not complied with, and the creditor or owner did not give a copy of the executed agreement, and of any other document referred to in it, to the debtor or hirer before the commencement of the proceedings in which the order is sought, or

(b)section 64(1) was not complied with.

(5) Where an enforcement order is made in a case to which subsection (3) applies, the order may direct that the regulated agreement is to have effect as if it did not include a term omitted from the document signed by the debtor or hirer.

 

The Rankines sought to contend that owing to a failure to comply with a section 78 request (on which point as mentioned, the Judge had ruled there had been compliance with the request) that the court should make a declaration under section 142(1) of the Act that by reason of the provisions of 78(6) Tesco were unable to obtain an enforcement order under section 127.

 

Section 142 is entitled 'Powers to declare rights of parties' and provides as follows:

 

(1) Where under any provision of this Act a thing can be done by a creditor or owner on an enforcement order only, and either—

(a)the court dismisses (except on technical grounds only) an application for an enforcement order, or

(b)where no such application has been made or such an application has been dismissed on technical grounds only, an interested party applies to the court for a declaration under this subsection, the court may if it thinks just make a declaration that the creditor or owner is not entitled to do that thing, and thereafter no application for an enforcement order in respect of it shall be entertained.

(2) Where—

(a)a regulated agreement or linked transaction is cancelled under section 69(1), or becomes

subject to section 69(2), or

(b)a regulated agreement is terminated under section 91,

and an interested party applies to the court for a declaration under this subsection, the court may make a declaration to that effect.

 

Simon Brown held the court had no power to make a declaration under section 142. He reached that decision in the following way:

 

Section 142 provided power to the court to declare the rights of the parties only in those situations where the court had power to grant or refuse to grant an enforcement order. The circumstances in which the court could make an enforcement order were limited to applications for orders under section 65(1), 105(7)(a) or (b), 111(2) or 124(1) or (2) (ie

as per the section 189 definition).

 

There was no power in section 142 to make a declaration in relation to the rights of the parties where it was contended there had been an infringement of section 78(1). Unlike sections 65, 105 et al, there is nothing in section 78 which provided for the need of an enforcement order.

 

In this part of his analyisis I am in agreement.

 

He further ruled:

 

Section 78(6) had application where the creditor failed to answer the request 'under an agreement'. Brown held 'The agreement was at an end. Therefore there is no reason why there cannot be enforcement.'

 

It would be helpful to know at what point in time the Rankines say they delivered their section 78 request. If it was delivered at any time after the agreeent had terminated, then I would agree.

 

However, if it was delivered during the currency of the agreement, I would have great difficulty in following this part of his ruling. It would be akin to saying a creditor may ignore his section 78 obligations with impunity and may escape them for all time and also the consequences of a failure to comply provided at 78(6) simply by ending the agreement and further, having ended the agremeent, the creditor is at liberty to enforce it.

 

Thirdly he ruled:

 

'the word “enforce” is not descriptive of the commencement of proceedings. Bringing proceedings during a time when the agreement has been brought to an end is only a step taken with a view to enforcement. It is not actually enforcement.'

 

This ruling took me aback. Whilst I can understand that the commencement of proceedings is 'not enforcement', invariably proceedings are commenced for the purpose of securing a judgment of the court upon some right which the Claimant believes he has over the Defendant

in order that upon securing it, the Claimant may then lawfully obtain a remedy for that right. It is necessary to commence proceedings because in our society where a man owes another some money, the creditor is not allowed to seize the debtor's belongings and sell them to raise sufficient to pay the debt. He is not allowed to make an arrangement with the

debtor's employer to pay him so much out of the debtor's wages. He is not allowed to do a deal with some third party who owes the debtor some money and tell the third party to pay that money direct to him. In all these situations, the creditor requires the existence of an

unsatsifed judgment to be then able to employ certain lawfully recognised enforcement procedures. Even with a judgment, a creditor is not allowed to seize the debtor's goods save by a bailiff, and so forth. In all circumstances, the creditor must act lawfully.

 

Likewise some proceedings may not be proceedings designed to enforce the agreement. Insolvency proceedings would not be proceedings designed to enforce the agreement for example.

 

'Enforce' does not appear in the list of definitions contained in section 189. The word therefore has no special meaning attached to it in the Act. The meaninig of 'enforce' is I would submit, intended to follow the ordinary, customary usage found in the English language.

 

In ordinary usage and in the context of an agreement, I would submit 'enforce' means no more than to 'compel obedience to'. Further, to enforce, connotes some resistance to obedience and hence the requirement of some effort or endeavour by which the one strives to compel the obedience of the other. The effort may still not result in obedience, but whether or not the one succeeded in compelling the obedience of the other, that effort was nonetheless an attempt to enforce.

 

In conclusion, as to the meaning of 'enforce, the word not having any specially defined meaning in the Act, I hold to the view that where the words 'may not enforce' appear in the Act, that means both 'to compel obedience' and also 'to strive to compel obedience'

 

For these reasons, I take the view that Simon Brown was wrong.

 

Simon Brown sought to draw an analogy with section 69(1) of the Solicitors Act, an Act also passed in 1974.

 

Section 69(1) of The Solicitors Act 1974 says:

 

Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered ..

 

Simon Brown concluded that if Parliament had intended creditors who failed to comply with 78(1) should be prohibited from bringing an action (ie commencing proceedings to obtain recovery of money or goods receivable under the agreement), then section 78 would have said so, in just the same way it is said in section 69(1).

 

In my view, that is a wrong interpretation, unless in the mind of the parliamentary draftsman, 'enforce' was to have some very narrow meaning. Unfortunately, nowhere in his judgment does Simon Brown say what that intended narrow meaning was, nor what would constitute 'enforce' within the meaning of section 78. And of course as I have already stated, the parliamentary draftsman did not think it necessary to define 'enforce' in section 189, owing I would sbmit to his being content that 'enforce' should mean what it ordinarily means.

 

In my view and adopting my previously stated view that 'enforce' is to carry the ordinary, customary meaning, the prohibition on enforcing therefore extends to cover any step by which the creditor 'strives to compel obedience'. That would include commencing proceedings and

doing anything which involved a threat or threat of consequence for disobedience.

 

Fourthly he ruled:

 

'the provisions of section 170(1) of the Act support the contention that a failure to comply with section 78 does not of itself give rise to the consequence that pending compliance with a request made under section 78 any steps taken are in some way invalid. It provides so far as relevant as follows:

 

“(1) A breach of any requirement made (otherwise than by any court) by or under this Act shall incur no civil or criminal sanction as being such a breach, except to the extent (if any) expressly provided by or under this Act.

(3) Subsection (1)does not prevent the grant of an injunction."

 

It follows that where a breach of the Act occurs, such as one of section 78, where no remedy is specified, the appropriate step is to seek an injunction. A view to this effect is set out in the notes to section 170 by the editors of Goode Consumer Credit: Law and Practice. In any event it is to be kept in mind, as the editors of Goode observe, that any such breaches may lead to questions relating to the licence of the lending body in question.

 

I do not follow this part of his reasoning. Section 170 is entitled 'No further sanctions for breach of Act.'

 

To begin with until lately, a breach of the obligations in section 78(1) did incur a sanction, in particularly a criminal one, expressly provided for at section 78(6)(b).

 

Section 78(6)(b) said: if the default continues for one month he commits an offence.

 

In other words, a creditor who persisted in failing to comply with his obligations faced the risk ofa sanction by being prosecuted for that failure which was an offence. Schedule I to the Act defines the offence as one of 'Failure of creditor under running-account credit

agreement to supply copies of documents etc.' where on summary conviction the creidtor is to be fined at 'level 4 on the standard scale'.

Further still, the entire Act does not contain the words 'sanction' or 'sanctions' save where they appears in section 170. Neither are these words in the list of definitions in section 189. Again therefore 'sanction' and'sanctions' will import ordinary, customary usage.

 

In ordinay usage a 'sanction' will be (say) some coercive measure, whether it be a penalty or restraint, intended to ensure or compel compliance or obedience to something.

 

I accept that a breach of section 78(1) does not expressly provide for a civil remedy which is available to the debtor for him to positively pursue. And it seems to me none was expressly included because it did not appear to the parliamentary draftsman that it was necessary to since the debtor wold be adequately protected by knowing the creditor would be unable to enforce, or adopting my interpretation 'strive to compel obedience'.

 

I don't have the benefit of a copy of Goode Consumer Credit: Law and Practice. sitting on a bookshlef at home. How I wish I did. I understand PT does and it would be helpful to know exactly what is said in relation to section 78(6) and section 170.

 

That said, I would accept that a debtor may retain within his armoury the option to bring proceedings for an injunction compelling compliance with section 78(1), but I would not hold to the view that unless and until such an injunction has been obtained, the creditor is entitled to disregard his section 78 obligations and take steps to enforce the agreement.

 

x20

[NitrousOxide]

I still fail to see how someone was sued without their signature to a contract?

Otherwise that pound my neighbour owes, I will sell to someone who will sue them for 100.